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North Carolina has already added online sports betting and online instant win tickets in 2023, but the state is far from done, and is even considering online poker and casinos.

Aug 21, 2023

NEWS: The North Carolina Lottery adds online instant win games to its offerings.
BEYOND the HEADLINE: Several other gambling expansions are still on the table in North Carolina, including online casinos and online poker.
NEWS: Rhode Island politician confirms what we all know: Money drives online casino legalization.
VIEWS: Penn’s Chief Compliance Officer urges Pennsylvania to ban “skill games” in op-ed.
AROUND the WATERCOOLER: BetMGM will pay the VA teacher after all.
STRAY THOUGHTS: The legal sports betting industry isn’t for everyone.

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North Carolina’s Gambling Shopping Spree

North Carolina will add instant win games to its online lottery offerings by the end of the year. The NC Lottery has sold draw game tickets since 2013.

Per WRAL, “The commission would cap the amount players can wager in a day ($505), a week ($2,000), and a month ($4,000) digitally. According to projections by the commission, in five years, digital instants could generate more than $416 million in revenue.”

There is some lingering debate regarding the Lottery’s ability to add online games.

"I really don't think that they had the authority to do that under current law," House Speaker Tim Moore said. "It's a gray area as told to me. I actually support the notion of going to the video lottery terminals, going to video terminals. I think the way that that should be done is through the legislature authorizing that."

A similar situation arose in Minnesota after that Lottery expanded into online sales, prompting the legislature to prohibit the games in 2015.

There are 16 US locales with some form of online lottery offering. North Carolina is the tenth US jurisdiction to offer online instant win games.

Connecticut – Subscription and draw games.
Georgia – Subscription, Draw, and instant win games.
Illinois – Subscription, draw, and instant win games.
Kentucky – Subscription, Draw, and instant win games.
Maine - 13-week minimum subscription - payments by mail.
Maryland - 13-week minimum subscription.
Massachusetts - Three-month minimum subscription.
Michigan – Subscription, Draw, and instant win games.
New Hampshire – Subscription, Draw, and instant win games.
Pennsylvania – Subscription, Draw, and instant win games.
Rhode Island – Subscription, Draw, and instant win games.
Virginia – Subscription, Draw, and instant win games.
Washington D.C. – Subscription, Draw, and instant win games.
New York – Two-week minimum subscription length.
North Carolina – Subscription and instant win games.
North Dakota – Subscription-only.

Beyond the Headline: VLTs, Casinos, and iGaming

North Carolina has been on a gambling expansion spree, legalizing mobile sports betting and authorizing online instant win lottery tickets. And the state isn’t done. The legislature is still in session and is considering VLTs, new casinos, and, yes, online gambling.

"There will be a conversation about it," Sen. Phil Berger said. "One of the things that we have to be cognizant of, and I think we've [been] thinking about this in terms of where in North Carolina potential casinos would be located, is the idea of some sort of market saturation and whether or not the more that you have on the phone that looks like a slot machine and acts like a slot machine, do you diminish the expectation that you have as far as the revenue is concerned from other things we're considering."

However, North Carolina is traveling down the “keep adding things until the measure dies” route. It’s hard to envision a conservative-leaning state legislature deciding to take the state from three tribal casinos and limited retail sports betting to commercial and tribal casinos, VLTs, and a full suite of online offerings in one year.

The kitchen sink approach is a common occurrence in states struggling to gain enough support for a gambling expansion. The theory is you can add another expansion that opponents of your effort agree with to bring them on board. Some of these lawmakers say they will then support the comprehensive effort, but when push comes to shove, they always have lingering concerns. So you gain a few votes and lose a few votes. And then, in a desperation hail-mary attempt, you try adding another expansion (and maybe another), and the same scenario plays out. You keep adding and adding until no one supports it.

And then there is the other chamber to consider, as House Speaker Tim Moore said, "I've got real concerns with the iGaming right now. I really do. I need to hear more data to know 100% where I am. But everything I hear right now causes concerns."

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Rhode Island Online Casino Was All About Money

I’ve long contended that the driver of legalized online gambling is money - and I’m far from alone in that assessment. If a state needs money or a current source of tax revenue is deteriorating, the “grime” of online gambling is stripped away as lawmakers start talking about stamping out the black market, lost revenue, and consumer protections.

Take the recent comments by Rhode Island Senate President Dominick Ruggerio.

“The funding is drying up from the money that the feds have given us during the COVID virus, and we have to supplement that income with something,” Ruggerio told Play USA. “So we’re looking at iGaming as a revenue generator.”

Rhode Island decided to act before the federal spigot was turned off, but when the federal dollars dry up, and states start scrambling to fill budget deficits, online gambling will be sitting there waiting.

Licensed Operators Frustrated By “Skill-Games” in PA

Skill games are a hot topic in several states. At least one of the state’s licensed casino operators has had enough in Pennsylvania. Penn Entertainment’s Chief Compliance Officer Chris Soriano recently published an op-ed in TribLive calling the state to act against these machines.

Soriano pointed to the unregulated nature of the games, which he believes holds as much as $.25 of every dollar wagered (compared to the $07.7 hold rates of licensed slots in casinos. And because the machines are unregulated and untaxed, local communities are missing out on $1 billion in state tax revenue yearly, per Soriano.

Soriano also noted the crime associated with the machines, pointing out a 2020 robbery-murder, when “a 50-year-old store clerk in Hazelton was murdered by a regular player of the shop’s skill games who robbed the store of $14,000 — cash he knew would be on hand because of the machines’ presence.”

Another incident cited was when current Gov. Josh Shapiro “charged two individuals with robberies of 25 different skill games throughout the Philadelphia area that totaled more than $100,000” when he served as the AG.

Skill games are also under fire in several other states, including an ongoing case in Virginia that has been unfolding for two-and-a-half years.

Per the Virginia Mercury:

“So-called skill machines, which proponents say don’t count as a type of gambling because they have a small element of skill that makes them different from traditional slot machines, have been a perennial sticking point for Virginia policymakers as the state has legalized more types of gambling. The General Assembly voted to ban the machines in 2021, but the industry has mounted a largely successful legal challenge that led retired Judge Louis Lerner to block the state from enforcing the ban through an injunction issued in December 2021.”

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Around the Watercooler

Social media conversations, rumors, and gossip.

Straight to the Point has been following the story of the Virginia teacher who took advantage of some wonky odds to score a $200k windfall, only to be denied those winnings by BetMGM. It appears the company has relented despite having T&Cs in place (there is a good and respectful back-and-forth in the thread by @Golfpunter1).

However, as Richard Schuetz (@schuetzinc) and Dave Sharapan (@sportsbkconsig) highlighted, timing is everything, and the timing here isn’t great.

Stray Thoughts

Raynham Park’s sports betting offerings are largely inconsequential. But its travails offer an important lesson for lawmakers, regulators, and would-be operators. And that lesson is simple and one I’ve mentioned before (particularly during this incident in Tennessee). Not everyone is cut out to be a licensed operator. Not everyone is ready for primetime.

The Massachusetts simulcast facility (a former greyhound dog track) has seen both of its sports betting partners sever ties. Bet365 pulled out of its agreement to be Raynham Park’s mobile betting platform, and Caesars threw in the towel on a retail sportsbook last week.

Bet365’s withdrawal was considered strategic, but with Caesars also jumping ship, maybe 365 realized its partner was problematic much sooner.

Raynham Park’s license has come under regulatory scrutiny due to the role of Chris Carney, who has been portrayed as everything from an owner to a volunteer doing odds and ends jobs around the facility.

As Jessica Welman (@JessWelman) put it on Twitter:

Either: 1. Raynham is profoundly downplaying Carney's involvement bc he is literal radioactive sludge and they need him off the license 2. Raynham let this guy who "paved some stuff" just waltz around and pretend to be boss to media & regulators
This guy testified before IEB that he had a "management role" inside the building for 2 years. When asked what that was today he legit said he unclogged toilets and was not paid.

Again, maybe we shouldn’t be putting a locally-owned simulcast facility on a similar level as an international, publicly-owned gambling company.